Study shows impact of immigration enforcement on California’s overall workforce

The economic impact of President Donald Trump’s mass deportation campaign on the California workforce is comparable to the start of the Great Recession, according to a new study from the UC Merced Community and Labor Center.

The study analyzed data from the U.S. Census Bureau and Bureau on Labor Statistics to measure labor participation in the private sector.

During the week of June 8-14, when Immigration and Customs Enforcement (ICE) conducted large-scale raids in Los Angeles and other parts of the state, California saw a 3.1% decline in its labor participation, according to the report. Meanwhile the participation rate grew by 0.5% throughout the rest of the country.

“This translates into roughly 465,000 fewer Californians reporting having worked during the week of escalated immigration enforcement,” said Edward Flores, the director of the UC Merced center and the report’s author.

By comparison, California’s labor force shrunk by 3% between December 2007 and January 2008, the first month of the Great Recession, the report said.

The data suggests the Trump administration's aggressive immigration enforcement — in which federal agents target all unauthorized immigrant workers, not just those with violent criminal convictions — impacts the entire workforce.

When simply looking at the raw numbers, more citizens (271,541) failed to show up for work during that week in June than noncitizens (193,428), the report said.

But because citizens make up a larger portion of the workforce, their participation rate fell by 2.2% while noncitizens experienced a much larger drop of 7.2% according to the report.

“What this report is demonstrating is that noncitizen workers do not work in some sort of vacuum that’s disconnected from the rest of our society,” Flores said. “It’s also not indicating that when noncitizens lose work, citizens gain it.”

He went on to say that because of the interconnected nature of the global economy, entire sectors are impacted when fewer immigrant workers show up for work. For example, fewer farmworkers mean less crops are being harvested. If crops are not being harvested, they are not being transported, stored or sold. That impacts transportation, warehouse and retail businesses, Flores said.

This domino effect can happen in other industries that are reliant on immigrant labor, like child care, Flores said.

If a local day care cannot open because workers didn’t show up, parents who rely on them to watch their children while they work, may have to take the day off.

Lastly, if immigrants are not working, they are not earning or spending. And that could have a serious impact on California’s tax revenues, Flores said.

According to a 2024 report from the California Budget & Policy Center, undocumented immigrants $8.5 billion in state and local taxes — mostly through sales and property taxes.

An immigrant-dependent economy

The UC Merced study has limitations. For example, it can only compare workforce participation between states — not individual counties or cities. Also, the data used in the study cannot be broken down by industry.

But previous research shows the food production and retail industries are particularly dependent on immigrant labor.

“Our entire food system is dependent on immigrants,” said Laura-Anne Minkoff-Zern, an associate professor at Syracuse University.

Minkoff-Zern studies the intersection between food systems, labor, immigration and social movements.

She recently co-authored a book, “Will work for food: Labor across the food chain” that examines the entire food system — from farms, grocery stores, restaurants, home kitchens and garbage dumps.

Minkoff-Zern said everything from farming to canning, to warehouse and restaurant work, is dependent on immigrant labor. And efforts to persuade citizens to work in farms have largely failed.

Minkoff-Zern has spent time working alongside Mexican farmworkers in California and New York. She said she could not keep up. The experience taught her that farm work is skilled labor.

“It was like a fantasy that I could just go enter this industry and learn how to do it,” she said. “I worked alongside Mexican workers, and I just gained so much respect for the strenuous nature of the job. They knew so much about what they were doing.”

Flores plans to continue analyzing monthly data from both the U.S. Census Bureau and the Bureau of Labor Statistics (BLS) to get a clearer picture of the economic impacts of Trump’s aggressive immigration enforcement.

If this trend continues, and fewer workers report to work, Flores said California should look into providing unemployment benefits to unauthorized immigrants.

“To not have an unemployment benefit system in place for those workers is affecting them, it’s affecting their families, it’s affecting their communities,” she said. “At some point, this state needs to start talking about what a state-funded unemployment benefit system looks like for undocumented immigrants.”

State lawmakers nearly expanded the state’s unemployment benefits program to unauthorized immigrants last year.

But Gov. Gavin Newsom vetoed Senate Bill 227 in September 2024, around the same time he vetoed two other bills that would have given other benefits to undocumented students and first-time home buyers.

Newsom said the unemployment expansion bill, “sets impractical timeliness, has operational issues, and requires funding that was not included in the budget,” in his official veto message.